New York, N.Y. (May 12, 2020) - On April 3, 2020, Governor Andrew Cuomo signed into law the Fiscal Year 2021 New York State budget. Of great significance for all New York employers is the amendment this budget makes to the state's Labor Law to include a new permanent requirement for sick leave. Under the new legislation, most employers are responsible for providing employees sick leave, the nature and measure of which is dependent on the employer's size and, in some instances, revenue. The law is effective on September 30, 2020. We discuss below the key provisions of this new law.

Amount of Sick Leave and Effective Date

The sick leave law applies to all employers within the state, as follows:

  • Employers with four employees or less and a net income of $1 million or less in the prior tax year must provide employees with up to 40 hours of unpaid sick leave.
  • Employers with four employees or less and a net income of greater than $1 million in the prior tax year must provide employees with 40 hours paid sick leave.
  • Employers of between five and 99 employees must provide employees 40 hours of paid sick leave per year.
  • Employers with 100 employees or more must provide employees up to 56 hours of paid sick leave per year.

Although the new law becomes effective on September 30, 2020, employees may be restricted from utilizing accrued sick leave until January 1, 2021.

Accrual and Frontloading

Employees must accrue sick leave at a rate of at least one hour for every 30 hours worked. Alternatively, employers may provide employees their full amount of sick leave at the beginning of each year as a lump sum payment.

Reasons for Sick Leave

A covered employee may use sick leave due to:

  • Mental or physical illness, injury or health condition of an employee or an employee's family member, regardless of whether the illness, injury or health condition has been diagnosed or requires medical care at the time the employee requests leave.
  • Diagnosis, care, or treatment of a mental or physical illness, injury or health condition, or need for such medical diagnosis or preventative care, for an employee or employee's family member.
  • Absence related to an employee or employee's family member who has been the victim of domestic violence, a family offense, sexual offense, stalking or human trafficking and seeks or obtains services, including from a domestic violence shelter, rape crisis center, attorney or law enforcement, or takes any other action to ensure the health or safety of the employee or family member or to protect those who associate or work with the employee, including but not limited to temporary or permanent relocation, safety planning, and preparing for or participating in criminal or civil proceedings.

Employers are not permitted to inquire about confidential information relating to a mental or physical illness, injury or health condition of an employee or an employee's family member as a condition to providing sick leave.

Under this law, a "family member" includes an employee's child (including foster child, legal ward or equivalent legal relationship), spouse, domestic partner, parent (including step-parent or foster parent or equivalent legal relationship), sibling, grandchild, grandparent, or the child or parents of an employee's spouse or domestic partner.

Job Protection and Anti-Retaliation/Discrimination Provisions

Similar to the provisions of the federal Family and Medical Leave Act, New York's paid sick leave law requires employers to restore an employee who has requested or utilized sick leave to return to the same position with equivalent pay and other terms and conditions of employment. An employer may not discriminate against, retaliate against or otherwise penalize an employee for requesting or utilizing sick leave.

Unused Sick Leave

Unused sick leave can be carried over; however, employers with fewer than 100 employees may limit an employee's use of sick leave to 40 hours per year, and employers with 100 or more employee may limit use to 56 hours per year. Additionally, employers are not required to pay employees for unused sick leave if they are terminated or otherwise separated from employment.

Incremental Use

Employers may set a reasonable daily increment for the use of sick leave, not to exceed four hours.

Rate of Pay

Employers must compensate employees at their regular rate of pay or minimum wage, whichever is greater.

Employer's Record Keeping Requirements

Employers are required to keep records showing the amount of sick leave provided to each employee for at least six years. Upon the verbal or written request of an employee, an employer must provide a summary of the amounts of sick leave accrued and used by the employee in the current and/or previous calendar year within three business days.

Existing Laws and Policies

Employers do not need to provide additional leave if they already maintain a policy that provides employees with the same or greater amount of leave, accrual, carryover and usage mandates under the new law. However, New York City employers should be cognizant of key differences between existing law and the new statute, which could impact their current policies. The newly-enacted law makes clear that it does not replace or diminish city or county paid sick leave laws. Hence, employers covered by the New York City Earned Safe and Sick Time Act (ESSTA) must continue to provide employees with leave that meets or exceeds the requirements of both laws.

The new paid sick leave law is similar to ESSTA in terms of permissible uses for sick leave, compensation, accrual, carryover/frontloading provisions, and anti-discrimination and anti-retaliation mandates. However, ESSTA does not take into account an employer's revenue, and it is more favorable to employers who have 100 or more employees. ESSTA requires covered employers with four employees or fewer to provide employees who have worked 80 or more hours in a calendar year with up to 40 hours of unpaid  leave and employers with five employees or more are required to pay up to 40 hours of paid leave. State law imposes a greater burden for high net income employers with four employees or less as well as large employers with 100 employees or more.

Although clarification may be provided when the state issues regulations or guidance, it appears that New York City employers should consider implementing the following changes pursuant to the newly-enacted state law:

  • Small employers with four employees or less with a net income of more than $1 million in the previous tax year should provide up to 40 hours of paid sick leave per year under the new law, as opposed to unpaid sick leave under the ESSTA. Small employers with four employees or less with a net income of $1 million or less in the previous tax year may continue to provide unpaid sick leave.
  • Employers with five to 99 employees must continue to provide up to 40 hours of paid sick leave per year, which is consistent with the ESSTA.
  • Large employers – meaning those with 100 or more employees – must provide up to 56 hours of paid sick leave per year, as opposed to 40 hours under the ESSTA.

We expect that the New York State Department of Labor will issue regulations or further guidance prior to the September 30, 2020 effective date. However, employers should be proactive and begin to review and revise their existing sick leave policies to ensure compliance with the requirements of the new paid sick leave law as of this fall.

For more information on these amendments, contact the author of this alert. You can also visit our Labor & Employment Practice page to find additional alerts in this area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.